UK iPhone price war unlikely

The Times has been discussing the extended availability of the iPhone in the UK with various members of the industry, all of whom agree that a price war over Apple's hot handset is unlikely.

Rather than newcomers to the iPhone market, Orange and Vodafone, slashing their prices in an effort to poach O2's contracts, the general feeling is that value will take precedence over price.

"Are we going to have an iPhone Armageddon?" asks Ovum analyst Steven Hartley. "Definitely not. Slashing prices dramatically would defeat the purpose of having it as it is a premium product."

Orange is expected to push its broader 3G network coverage as a major sales point, speaking to disgruntled O2 contract holders who have been unhappy with the carrier's data network delivery.

"I really think we are on the verge of the next big consumer revolution," says Tom Alexander, chief executive of Orange, which has reportedly received over 125,000 pre-orders for the iPhone. "It’s all about accessing rich media from wherever you are. All off a sudden you have to have a multimedia device — it’s not just about voice and text any more."

Despite the media frenzy encompassing the iPhone, it's still only a small part of the overall mobile and smartphone market, which is another reason many industry players don't believe the carriers will battle it out on contract prices.

Rather, the iPhone benefits network operators by encouraging consumers to investigate the possibility of switching carriers - something that less than 40 per cent of mobile users ever actually do.

Proliferation of the iPhone, therefore, is viewed as a vital catalyst in reinvigorating a stagnant mobile market.

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